You posted in the Lacerte SDK (software developer's kit) users' section, not in the Tax Talk or end user community, by the way.

@Just-Lisa-Now-  can you see and move this topic for Kimberley? Thanks.

"as it relates to the tax preparer."

It depends on which part you are preparing. All of it? The 1040 only?

"What liability does the preparer carry when recording this transaction?"

Which part? Are you helping establish the retirement plan?

Summary:

I establish a C Corp, and then a retirement plan for that entity. I roll my existing 401(k) to this plan, and it is used to "buy shares" which makes the funds available to the corporation. So there are three entities:

C Corp (1120)

Corporate retirement plan (5500)

Individual employee (1040)

As for "time frame" I believe it's treated as a regular rollover; I've looked into this a bit over the years and don't remember seeing a different rollover rule.

"with a distribution code 7 and both the distribution total and taxable total"

The Form 1099-R is for money out. The issuer doesn't know what is being done with the funds.

I found you a couple of resources that should be helpful:

https://www.irs.gov/retirement-plans/rollovers-as-business-start-ups-compliance-project

https://www.irs.gov/pub/irs-tege/robs_guidelines.pdf

https://www.nerdwallet.com/article/small-business/rollovers-as-business-startups-robs